A Segue From The Supply Chain: SAP’s Digital Marketing M.O.

As enterprise technology companies race to make their respective suites the digital marketer’s platform of choice, building or acquiring to fill product portfolio holes becomes near protocol.

Global German software giant SAP, which recorded $5.4 billion in revenue last quarter, is no different – the company’s been active on the commerce (Hybris) and advanced analytics (KXEN) acquisitions front in recent months. Once thought of as an enterprise data warehouse and supply chain specialist, analysts seem bullish on SAP’s position as a data-driven digital marketing contender.

The ability for end users to easily configure workflow processes is what SAP bakes into all of their enterprise apps, born from its roots in manufacturing and supply chain and now carrying over to its digital marketing solutions as well, said Leslie Ament, SVP of research and principal analyst at Hypatia Research Group. “If you are an organization that wants to automate repeatable processes, whether you’re using rules-based workflows or analytical algorithms as triggers, you can do that using enterprise information.”

HERVE PLUCHE: We launched the product roughly a year ago under the name SAP Precision Retailing assuming that the first vertical that would embrace this would be retail. What we realized was consumers shop throughout the day and may be riding public transportation and make a purchasing decision anywhere, so we renamed the product from Precision Retailing to Precision Marketing.

How many customers currently use it? What industries?

We see a lot of clients asking for the opportunity to test and validate consumer interest in new [digital] experiences. We just released what we call the Starter Pack to allow clients to try before they buy. When we look at our portfolio of qualified leads and companies that we expect will deploy SAP Precision Marketing over the short term, they have the opportunity to validate use cases through trial. We currently have 61 companies in retail and CPG, transportation, banking and oil and gas [testing Precision Marketing]. We have live deployments with a couple of accounts in the grocery vertical, cosmetics, transportation [like] The Montreal Transport Society (STP) and we expect to ramp up deployment in Q1 of next year.

How is your version of a “Marketing Cloud” different than what’s being developed by other enterprise platforms – Adobe, Salesforce.com, Oracle, IBM, etc.?

First, when you think about the old days of marketing, you’d start with content and then that content would be pushed to the consumer. We would then push that through multiple channels, including mobile. Competitors may automate and digitize, but fundamentally, they start from content. This is not what we do and that’s a key differentiator. We start with consumer context, such as your profile through extensions of CRM and who you are, understanding your location and your need at a particular moment in time and then, what’s unique about the context, such as, "Why did you go to Best Buy twice and did you buy something the second time [or return an item]?"

You can find startups that are making headway in context-aware, one-to-one marketing. Some can do it. But where I firmly believe SAP meets the needs of our clients long-term is around scalability and big data. We have the processing power and real-time capability that will not adversely affect performance as we increase the number of customers we service. We see clients around the world switching from established players in the IT space -- you mentioned some of them -- they realized their system or infrastructure simply collapsed once they got to 100,000 consumers.

So, are you saying other platforms can’t handle the volume?

When you start to look at what it takes to power one-to-one experiences for the consumer through in-memory database technology, the concept of big data in near real-time, you need to tap into a broad array of information stored behind the firewall and multiple enterprise applications like ERP, business intelligence, CRM and all of the components around mobile technology.

Back to big data analysis, which obviously can be applied to marketing use cases, as well as fraud prevention, financial forecasting, etc. You run all your applications on HANA. What is HANA, in layman’s terms?

Instead of having the back and forth between the processor and your traditional memory or database, everything is stored in-memory, which means we’ve increased by 1,000 times the speed of service. The benefit to our client is, you can have millions of clients on the platform and still get that performance. You don’t want to press a button on an app and wait five seconds. We want to meet that one-second threshold. HANA infrastructure offers the ability to stay below the one-second threshold while serving millions of consumers.

As you develop your marketing portfolio, to what extent are you talking more with CMOs than CIOs?

It’s true that today when we look at the footprint of SAP, I would say our main channel of access in the organization is the CIO of the organization. Historically, this is where the SAP client would sign contracts around enterprise applications. In this new world of digital and one-to-one marketing, we see more of the budget shifting from IT to marketing, which means as a company, we need to adapt our sales cycle to really reach the CMO and establish credibility and this is one of the main challenges for SAP today and a challenge we are attacking head-on. You may have heard about the CMO Track at Sapphire [an annual global SAP gathering] we are putting increased emphasis on making relationships with the marketing organization.

Precision Marketing is among a slew of marketing solutions ranging from CRM to loyalty, digital asset and real-time offer management. Are these all islands unto their own or do you develop symbiotically?

I’m a strong believer that the one-size-fits-all doesn’t necessarily happen in marketing, because you have an infinite number of use cases. When you take a look at what it takes to deliver one-to-one experiences, it’s much broader than the enterprise application or business process. When you start targeting or aiming [messaging] for the consumer space, the consumer is king and you have limited control over how the consumer will behave.

On the client side, during that transition from packaged solutions on-premise toward a world of digital marketing with the consumer as the hub, we will see a blend of solutions -- some that are on-premise and some that are on-demand-delivered turnkey, as a service. Some clients will want to completely delegate an end-to-end solution to a company like SAP… and some want to buy components and deploy them as an integrated solution behind a firewall. We adapt to what our clients want to do. We are a cloud solution delivered as a service and want to enable really specific use cases.